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Local motor industry depressed

Staff Reporter 12-05-2009

The local motor industry is depressed with some of the players diversifying as a way of keeping their heads above the murky waters.

Some of the car dealers have started offering hiring services as the industry faces one of its toughest time in the last five years.

Car selling companies sprouted in Harare since the turn of the century as it had become one of the most viable businesses. It became very viable, riding on the hyper-inflationary environment, with cars appreciating value instead of the other way round.

In an interview with BusinessZimbabwe, a car dealer along Samora Machel in Harare said they were going through a very bad patch and had to come up with creative survival strategies if they were to survive. "We have been facing challenges since the beginning of the year. Actually, our problems started in the last three months of 2008 but it was not very significant. However, we are now faced with challenges which are largely a result of the fiscal and monetary policy changes which have been introduced," said the car dealer.

The partial dollarisation of the economy has seen inflation dropping and at the same time there has been a stabilisation.

"We also have to acknowledge that we have for long been surviving on an artificial economy with a lot of foreign currency around especially when there was massive diamond dealing in Manicaland's Chiyadzwa. Our assessments put the amount of money that was coming into the country at around US$300 million and this was money which was going onto the parallel market and most of the forex dealers opted to buy cars," added the car dealer.

He said it made a lot of business sense to offer car hiring services because some of the vehicles have been parked for more than six months now without a possibility of a sale.

"We have service charges to pay and the best way of doing so is by offering new services such as car hire or any other promotions which may generate income for us," he added.

While car dealers may be looking at ways of surviving, individuals who may want to dispose off their vehicles are faced with a worse dilemma.

A glance at the vehicles for sale of the local newspapers paints a very gloomy picture.

The price range of vehicles is between US$1 000 and US$10 000.